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Top Retirement FAQs

Taxes are an important part of income planning in retirement. That’s because you may be getting more of your income from personal savings and distributions from your investments, which can be taxed at different rates. This can have a big impact on the after-tax dollars that you have to spend in retirement.

The chart below shows the after-tax cash flow from different kinds of distributions.

With careful planning, you may be able to reduce or delay paying tax on income from your personal savings. Ask an RBC Financial Planner to create a retirement income plan that gives you the income you need in the most tax-efficient way possible.

For many Canadians, health—and the cost of health care—becomes a prominent concern at some point in retirement. Many expenses may not be fully covered by provincial health insurance, resulting in additional out-of-pocket expenses you hadn’t planned on. To prepare for potential future health costs, it’s a good idea to ensure a portion of your investments are liquid and can be easily converted to income when and if you need additional funds. You can also set up an emergency savings account that offers easy access to cash.

Creating a plan that looks after your interests if you were to become physically or mentally incapacitated is also important, which includes deciding who will manage your affairs if you cannot (such as a Power of Attorney or Mandate in Quebec).

Also looking at lifestyle decisions, such as knowing whether to right-size your home, can help you be better prepared.

Retirement is a time of change. Working with an RBC Financial Planner can help you live your best retirement while preparing for potential health changes down the road.

If you're like many people, you may think that if you were to become mentally or physically incapacitated, your spouse or partner could simply act on your behalf. But this is not the case. Without a court order or a general Enduring Power of Attorney, your family members could not manage your financial affairs.

An Enduring Power of Attorney (Homologated Mandate in Quebec) gives someone you trust the power to make decisions for you.

You can set up a Power of Attorney for financial decisions, as well as a Power of Attorney for health care (or Advance Health Care Directive), which gives the power to make decisions about your personal care or health care. It also allows you to list which medical measures you are okay with. Even in areas where a living Will cannot be enforced, a Power of Attorney is an effective way to make your wishes known.

Moving to the U.S. for part of the year is more complicated than packing your summer clothes and getting on a plane. There are important considerations to becoming a snowbird, including what items to bring, how long you are allowed to stay before you need to start paying U.S. taxes and the potential for losing your provincial health insurance coverage.

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Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.

The content of this publication is provided for informational purposes only and is not intended to provide specific financial, investment, tax, legal, accounting or other advice for you, and should not be relied upon in that regard. All charts, illustrations, examples, case studies and other demonstrative content are general and have been provided in this publication for illustrative purposes only. The case studies included do not represent actual events or real individuals. While efforts are made to ensure the accuracy and completeness of the information at the time of publication, errors and omissions may occur. Readers should consult their own professional advisors when planning to implement a strategy. This will ensure that individual circumstances have been considered properly and that action is taken on the latest available information. Interest rates, market conditions, tax and legal rules and other investment factors are subject to change.

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